US mortgage applications fell 2.9% in the final week of July, following a 6.4% drop the week before and marking the steepest two-week decline in two months. The pullback tracked a rise in borrowing costs: the average rate on a 30-year fixed mortgage climbed to a one-year high of 6.81%. That increase was driven in part by higher term premiums, as worries that the Federal Reserve may delay further action against inflation pushed the yield on the 30-year Treasury bond to its highest level in 19 years.
Refinancing activity, which is particularly sensitive to short-term interest rate movements, slipped 2% from the prior week to its lowest level since May of last year. At the same time, applications for mortgages to purchase homes declined 4%.
